Michigan should continue to see steady job growth into next year, although manufacturing and the auto industry will become less of a driver.
That’s according to the latest economic outlook from Comerica Inc.
In a recent report, Comerica noted that auto sales peaked last fall at an annualized rate of 18.1 million units. Additionally, the resurgent auto industry in July helped to drive manufacturing employment in the state to more than 604,000, the highest level since 2007, Comerica economists wrote in an economic briefing issued this week.
As auto sales settle back in the fourth quarter to an average pace of 17.2 million units a year and experience “moderate deterioration” into 2018, Comerica economists expect manufacturing employment to cool and the service sector to drive job growth.
“Regardless of the eventual downward slope, our assumptions are consistent with eventual job losses in manufacturing. We look for gains in service-sector jobs to keep Michigan’s expansion steady through 2017,” according to the Comerica report.
Comerica expects state GDP growth of 2.5 percent in the third and fourth quarters and for all of 2016, followed by 2.2 percent growth in 2017. Job growth in Michigan, forecast to reach 2.2 percent for 2016, will slow to 1.5 percent in 2017, the same rate as 2015.
Michigan’s unemployment rate will further decline to 4.1 percent for the fourth quarter and end 2016 at an annualized rate of 4.5 percent, then decline further to a projected 3.6 percent in 2017, according to Comerica.